In Europe the Volkswagen closely challenges the Opel Insignia; or our next Holden. Both mainstream brands are also acutely aware that premium brands such as BMW are pushing downwards in price and up on extra features and technology.

In short, ‘mainstream’ is threatened by ‘premium’ for the first time ever. Can this German-produced sedan nab an early win for the former group?

OVERVIEW

Rewind five years and, in Australia, the previous 220kW/350Nm 3.6-litre V6-engined Passat Highline claimed 0-100km/h in 5.5sec and cost $55,990 (plus orc). Today’s 206 TSI R-Line uses a 2.0-litre turbo engine that makes less power than the old model, identical torque and with an unchanged sprint time. Plus, it’s $2000 pricier.

By comparison a BMW 325i back in 2012 offered a 160kW/250Nm 2.5-litre non-turbo, managing an 8.6sec sprint with a $71,900 (plus orc) pricetag. Now, a BMW 330i uses a 2.0-litre turbo to match the Volkswagen for torque, with a 5.7sec sprint and all for $2000 less than before. Plus, there’s a notably improved equipment list.

The Passat exclusively gets with tri-zone climate control (versus dual-zone), heated front seats and active cruise control, while the 330i counters with a head-up display.

But considering this appears to be a more expensive yet no-quicker replacement for Volkswagen’s former fast flagship sedan, has the company moved the game on?

Beyond the admittedly smaller 330i there is another sidekick offering to the Passat 206 TSI R-Line, and it’s the Volkswagen Group’s own Skoda Superb 206 TSI. As the name suggests, it offers an identical drivetrain as well as similar performance all in a slightly larger body, for $50,990 plus on-road costs.

From the outset, the Volkswagen starts with a $7000 higher pricetag, although it includes features that are optional on its relative, including adaptive suspension, blind-spot monitor, lane-keep assistance and automatic parking assistance that all form part of a $3400-optional package on the fellow 206TSI.

Another $1500 is required on the Superb to get full leather trim with electrically adjustable front seats standard here, although the Passat still misses out on a 12-speaker audio system, front seat ventilation and rear seat heating that would feature on a Skoda for its now-optioned-up (yet still-cheaper) $55,890 (plus orc) sticker.

Either way, a panoramic sunroof remains a $2000 option on this 206TSI, despite being standard on a $1200-cheaper Calais V which exclusively adds a head-up display and its own premium Bose audio system.

Although the inclusion of Apple CarPlay and Android Auto smartphone mirroring technology is a fine addition to the satellite navigation and voice control systems, the Passat’s eight-speaker audio quality is average and a digital radio is unavailable.

Mostly, however, the 206TSI offers a semi-premium cabin ambience. The soft-touch upper dashboard is nicely finished, and the standard full-colour display ahead of the driver complements the high-resolution 8.0-inch centre touchscreen quite nicely.

Does it feel like a near-$60K cabin, though? Not quite. Most notably, the rich leather upholstery may be pulled slightly down by supposedly sporty ‘fake carbonfibre’ trim inserts, and the scratchy lower dashboard plastics betray those higher up.

The 206TSI R-Line makes a more convincing case for itself further back. Its rear seat is nicely padded and legroom – although not quite to Superb 206TSI levels – is vast and demonstrably superior to the more compact 330i.

The tri-zone climate control is a nice touch for rear riders who will also enjoy expansive side views and acres of headroom. With a huge 585-litre boot and either ski-port or 60:40 split-fold backrest capability, it’s both plush and practical.

This is the engine and six-speed dual-clutch transmission (dubbed ‘DSG’ or Direct Shift Gearbox by its maker) that drives the Golf R. With a kerb weight of 1589kg the Passat 206 TSI isn’t quite as slinky as that hot hatchback, though it remains brisk.

Off the line this Volkswagen sedan doesn’t feel fast. Pedalled quickly, the auto slips its clutches and, when joined by some turbo lag, it can amount to frustration at times.

From there the powertrain is all positive – responsive, rapid, smooth and silky. With maximum torque between 1700rpm and 5600rpm, and peak power from those latter engine revs until 6500rpm, the 206TSI R-Line feels like a proper performance sedan.

Despite rolling on low-profile 19-inch tyres, ride comfort is brilliant in any adaptive suspension mode (Comfort, Normal or Sport), and certainly more superb than the floaty, uhh, Superb.

Comfort may be a tad floaty at low speeds (over speed humps, for example) yet it’s staggeringly good at triple-digit pace on a country road, being both soothing and controlled. Normal is near-perfect around town – as ever, it’s the ‘all-rounder’ setting – while Sport genuinely enhances the handling of this sedan beyond urban confines.

In concert with a finely tuned Sport electronic stability control (ESC) setting, solid grip from Pirelli Cinturato tyres and the standard all-wheel drive system, the Passat can slurp up a twisty road with staggering ease.

The variable-ratio electro-mechanical steering even comes to the fore with creamy smooth and quick responses, being surprisingly more impressive when the going gets tough than when trundling around town, where it can feel a bit loose.

Where this Volkswagen most struggles is with driver engagement.

A rear-drive BMW or Holden feels better balanced and more responsive to throttle inputs. The 206TSI doesn’t have the sharpest front-end beyond clinging to tyre grip, yet the all-paw system doesn’t send much drive rearwards; attempt to pick up early throttle on corner exit, and understeer will prevail.

What it prefers is a point-and-shoot driving style, although to be fair that can be devastatingly effective and perversely pleasurable. Humble white sedan versus showy sports car? The latter would want to have a good driver.

While road noise is low and this ‘mainstream’ contender is packed with ‘premium’ active safety equipment, not all of it works as well as it could.

The lane-keep assistance, for example, can feel punch-drunk as it wanders between lane markings. The lane-departure warning is also anxiously tuned. When an indicator is applied and a lane change attempted, it insists an enormous gap should be provided ahead of the car travelling alongside and applies firm steering pressure to suggest not changing lanes, when no motorist would view that as cutting them off.

SAFETY

ANCAP rating: When tested in 2015 the Volkswagen Passat scored five-stars with a rating of 35.89 out of 37 possible points.

WARRANTY AND SERVICING

Servicing: Volkswagen’s capped-price servicing program extends for five years or 75,000km, the first three of which costs a well-above-average $1764.

RIVALS TO CONSIDER

A Calais V is cheaper, with more involving dynamics but sans a high-quality cabin and decent economy. A pricier 330i offers a sharper chassis, a more cohesive drivetrain and a nicer interior with better infotainment, but with less space. The Superb 206 TSI is roomier and cheaper, but with undercooked suspension.

TMR VERDICT | OVERALL

Volkswagen’s Passat 206 TSI R-Line would achieve a four-and-a-half-star rating if its pricing was more convincing. It isn’t that this fast flagship sedan is bad (or even average) value, but rather it hasn’t quite kept up with intense competition.

Inside it feels like a sub-$55K offering including the sunroof, not a near-$60K one. It’s a bit too far beyond a Calais V and a bit too close to the demonstrably more dynamic 330i, although it is more convincing than its Superb 206TSI cousin.

There otherwise isn’t much to criticise. For its combination of space and comfort, luxury and quality, performance and ride comfort, and seriously (as in, with a serious face) dynamic chassis, this Passat 206 TSI R-Line is a terrific all-rounder.

It also very nearly takes a win for ‘mainstream’ sedans over the ‘premium’ proper.